How I trade central bank announcements

How do central bank announcements shape inflation and interest rates—and what trading opportunities do they create? Trading expert Michael Stark shares his strategies, insights, and real examples from volatile markets.

Alongside the NFP (Non-Farm Payrolls), central banks’ announcements and press conferences are some of the most exciting events for me as a trader. Most major markets, but primarily forex and precious metals, can move rapidly around central bank announcements. These generate both potentially excellent opportunities to trade and enormous financial and emotional risks for traders, especially when shifts in inflation and interest rates are at stake. This article outlines how I typically approach trading around central banks’ announcements. It’s not a firm guide or a rulebook for anybody else, but I hope what you find here is a useful aid for your own research and testing.

In the most recent episode of Exness Trading Talks, we discussed what to expect from central banks’ announcements. Here, I’m going a bit deeper into how I turn expectations into personal approaches to trading announcements of different types. If you’ve not watched it yet, here’s the summary of the podcast and the full video.

Highlights of central banks’ announcements and their impact on inflation and interest rates

Announcements and financial markets’ reactions

Once a central bank’s closed-door meeting is over and the participants have reached a decision, it will usually be announced at a prearranged time. Depending on the central bank, the head (chair or governor) will briefly state the decision on rates—the core part of central bank announcements—and read out the statement with its potential effects on inflation and interest rates.

The announcement of the rate usually isn’t very important for major central banks because it’ll be priced in, and central banks want to avoid surprises where possible. However, minor central banks like the Reserve Bank of Australia or the Bank of Canada are historically more likely to decide something unexpected than the Fed, ECB, BoJ, or BoE. An unexpected change in rates or a major change in another policy is rare, but when it does happen, the effects can be shattering.

In January 2015, the Swiss National Bank (‘the SNB’) dropped its four-year peg between the franc and the euro. This caused total chaos in markets and a sudden revaluation of the Swiss franc’s value against the euro on the foreign exchange market, influencing inflation and interest rates in Switzerland and beyond. Such sudden moves can make prices rise sharply for imported goods, adding to economic uncertainty.

15 January 2015, a day that will live in infamy.

The euro-franc collapsed from the peg of 1.20 CHF to reach a low of around 94 cents before recovering to 1.08 CHF over the following days. This was an enormous economic shock; several brokers went bankrupt, thousands of traders faced negative balances, sometimes into the tens of thousands, and a few brokers even took legal action against clients with negative balances to try to recover their losses.

A surprise announcement of this kind is exceptionally rare and, in my opinion, almost impossible to trade responsibly. However, a smaller surprise, such as the single hike from the Bank of Canada in summer 2017, can rarely offer a good trade for an opportunistic yet realistic trader reacting to unexpected central bank announcements.

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Press releases and statements: Reading inflation and interest rates’ signals

Central bank announcements, and subsequent press releases and statements, are normally drafted prior to the announcement and released in their final versions with the announcement. The press release is usually just a condensed version of the full statement, so traders often consider them interchangeable. 

Traders look for significant changes from the previous statement, especially in mentions of inflation, employment data, the labour market, purchases of government bonds, economic growth in general, and inflation and interest rates projections. It’s very rare for a central bank to signal directly in a statement exactly what it plans to do at its next meeting: the committee probably doesn’t know that for sure yet anyway.

New mentions of inflation, consumer prices, or the removal of qualifiers from previous mentions, including key measures like the consumer price index, are usually among the most important specific parts of each statement. For more about common phrases used in statements, please see The Fed’s forward guidance: How it affects monetary policy and markets.

Several central banks also release a breakdown of how their committee voted in each decision. Depending on the specific bank, this might be included in the statement or separately.

The Fed’s press release includes a list of who voted to do what. In July 2025, two members took the unusual step of dissenting.

It’s quite rare for members of the FOMC to dissent from the majority decision, but for the BoE a unanimous decision is the exception rather than the rule. In the situation of a smaller majority than expected, such as the 6-3 split between hold and single cut at the BoE on 19 June 2025, traders might consider the minority’s position more likely to be realised at the next meeting, but this depends on various other factors, like economic data.

Press conferences: Clues on inflation and interest rates

Most central banks start their post-meeting press conferences half an hour after their central bank announcements and the release of their statements. For example, in the summer time, the Fed’s initial announcement would be at 18:00 GMT and the press conference would start at 18:30 GMT. The press conference normally starts with a prepared statement by the head of the central bank, which is different from the (usually shorter) statement and press release that come with the initial announcement. It’s important to notice significant differences between the two statements, as any differences can signal changes to inflation and interest rates outlooks.

In my view, how a press conference unfolds and its impact on markets depends as much on the questions being asked as on how the bank’s head answers them. Usually, nothing in their answers will be committal to any particular future action and will generally remain in line with the previous statements, but it’s possible to find nuggets of insight here and there. A central banker might give more details about which regular economic releases they’re watching now and why, which can also help traders to find points of focus for businesses affected by changes in central bank announcements.

Interpreting press conferences is a broad topic that involves many different factors, including politics, interpersonal relationships, and traders' reactions to changes and clarifications of these. Stay tuned for a future Exness Insights article exploring this topic in depth.

My practical approaches to trading central bank announcements

While I think there is such a thing as a typical central bank announcements pattern, no two are ever exactly the same or occur within the exact same context or sentiment, and policymakers’ decisions can dramatically influence market expectations. I’ve found it important to maintain situational awareness and be prepared to react to various developments, but the following observations are just my opinions.

At the time of writing on 30 July, I’d call the Fed’s latest meeting typical overall. While it was unusual to see two members of the FOMC dissent from the decision to call for rates to be cut, this was fairly widely expected in advance and didn’t seem to have a strong impact on markets.

My “base case” going into the announcement was that rates would not be cut, the Fed would continue with their “wait and see” approach, and the discussion on tariffs would be a focus point in the statement and press conference, with at least a couple of questions in the latter about ongoing political pressure for the Fed to cut rates or decrease quantitative easing. In this situation, Gold would probably decline, at least in the very short term.

Gold declined overall in the immediate aftermath of the Fed’s meeting on 30 July. Note the low timeframe, M5.

In response to this, I sold a small volume around 18:10 GMT when it seemed clear that the price would break below 3,300 USD with a stop at 3,310 USD, a reasonably generous trailing stop (I think it was about 50 pips but I don’t remember exactly), and a target set at 3,275 USD. It worked, and I made a modest profit. I could’ve certainly made more if I had a slightly further target, but equally, I could’ve made less if the price had started moving up earlier. I don’t aim to capture every last pip of a post-announcement movement, just make the most of it, where possible.

I find it helpful to have a general response ready in advance; this can help you react more positively to major surprises or market moves. The approach can be simply to do nothing and wait until the situation is clearer, but here’s an example of how an active approach worked for me in the past.

At the 2020 Jackson Hole Economic Symposium, an annual gathering of central bankers, attendees’ expectations were that Jerome Powell would announce the abandonment of near-term inflation targeting in favor of a longer-term 2% target, accepting extended periods of off-target inflation while maintaining flexibility in monetary policy.

I reasoned that this could mean the Fed would be comfortable with higher inflation in the coming years, as the impact of COVID-related monetary and fiscal stimulus became clearer. As part of this expectation, I also suspected there would be an enormous demand for gold. So, I prepared to buy a relatively large volume of gold, hold it for much or all of the speech, and close when the upward momentum started to decline clearly.

The large upward candlestick near the middle was the period of Jerome Powell’s speech at the virtual symposium on 27 August 2020.

Once the announcement was made, my preparation paid off. This was one of the most profitable CFD trades I had made since COVID. I was sure of the outcome and set a relatively close trailing stop once I saw my rolling profits reach three figures, going from 1,912 USD to 1,934 USD. This trade was the culmination of years of practical experience, thorough research and monitoring, and (in my opinion) a well-calculated risk.

In both of these cases and others, it’s key to remember that markets often behave contrary to reasonable expectations. It’s impossible to be 100% certain about any outcome, so I always set a stop loss on every trade and try to avoid ever risking more than 2% of my balance on any type of news trade, except in extremely rare situations such as 27 August 2020. How you manage risk, cut losses, and run profits is up to you, but I think you must have a tested approach to doing these before trading central banks’ announcements for real.

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Final thoughts: Execution is essential to trade central bank announcements

This article is just a glimpse into my experience trading central bank announcements. There are many different approaches to trading inflation and interest rate shifts that result from central bank announcements, and testing these can help you determine the best strategy for volatile markets, especially when considering broader monetary policy cycles. If this interests you, check out the related articles on Exness Insights for different perspectives, including those on scalping and general news trading.

Speaking from personal experience, if you are ready to trade the news, Exness is the best place to do it. By offering the fastest and most reliable execution for gold compared to other major retail brokers, Exness ensures that even during central bank announcements, the Fed’s press conference, or a surprise rate change, you can still receive an accurate price in milliseconds.